Fringe goes mainstream
February 24, 2010
Milwaukee Public Schools faces a conundrum that might be familiar to systems nationwide. The district needs to rein in exploding healthcare and retirement costs, but must overcome a recalcitrant teachers union, which has outsized influence on the school board. At issue is the district’s 77 percent “fringe benefits” rate; that means that the cost of a typical employee in benefits alone is 77 percent more than the employee's pay. (It’s usually more like 30 percent.) If you include unfunded liabilities, namely retirement promises made to teachers and other staff, that percentage rises to nearly 104. In other words, an employee costs the district twice as much as their salary…in benefits. The biggest offender is health care, where the district offers two plans, but provides no incentive for employees to choose the cheaper option; further, the district picks up the employee contribution tab, as well as the employer's. But if you’re a superintendent or school board member who even thinks about taking on these unaffordable perks (in order to, say, avoid cuts to services that actually benefit kids), prepare to be run out of town. We hope you have a steady steed, Mr. Thompson.
“Opinion: MPS faces a crisis in both accountability and democracy,” by Bruce Thompson, Milwaukee Journal-Sentinel, February 20, 2010